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• Tesla profits down 24 percent
• Robotaxi market could reach $10 trillion
• Tesla market cap potentially at $8 trillion through autonomous driving
Tesla has already reduced prices a total of six times since the beginning of the year in order to achieve higher sales figures. That has paid off, with Tesla accounting for a 62.4 percent share of all electric vehicle sales in the first quarter of this year, according to a published report by Cox Automotive. In contrast, profit fell 24 percent year over year, according to Tesla’s earnings report.
Price cuts will affect investor expectations
This conscious approach by CEO Elon Musk has had an impact on the stock market. The US investment bank Jefferies downgraded its rating from “buy” to “hold” because of uncertainty about the impact the pricing will have on investors.
Analyst Philippe Houchois expects a period in which Tesla’s earnings will not meet investor expectations. “Tesla is clearly above average in terms of technology from software to batteries to manufacturing productivity, but there is a need to catch up when it comes to building competencies in marketing and product planning,” said Houchois, according to the shareholder.
Robotaxis market with high potential
Tesla’s market cap is currently $539.01 billion. The stock is currently valued at $170.06 (as of May 7, 2023). Cathie Wood’s investment company ARK Invest sees incredible potential for the electric car manufacturer in the Robotaxi technology. “We believe the global robotic taxi market could be worth $9 trillion to $10 trillion over the next decade,” ARK Invest’s Tasha Keeney told Yahoo Finance Live.
This gives Tesla the opportunity to further expand its software for autonomous driving and to make its vehicles available as robot taxis in the further course of the process. This allows the company to generate ongoing income. Keeney predicts that Tesla stock could reach $2,000 by 2027, with a bull market cap of $8 trillion possible. “As we analyzed in our report, it will be the highest return per battery produced,” she says. Their expectation for the availability of Tesla robotic taxi software is mid-next year, with the most optimistic case being the fourth quarter of 2023. “Tesla can do it. They have a multi-year advantage over the competition,” Keeney said.
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